Oireachtas Joint and Select Committees

Wednesday, 6 July 2022

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Pre-legislative Scrutiny of the Companies (Protection of Employees' Rights in Liquidations) Bill 2021: Discussion

Ms Maeve McElwee:

Exactly. My understanding, and I will defer to the legal piece on this, is that in company law the idea of looking at this in a preferential staggering is that all creditors have an opportunity to be able to recoup some of their losses from a business that becomes insolvent, some of those being other smaller suppliers who also depend on some of that payment coming through so they can, in turn, pay their own employees as the businesses run through. If we were to commit to a preferential order, and I am not saying we should not, I am simply pointing out the fact that if we made that commitment, there is less to be distributed elsewhere for other workers potentially in other businesses. If we were also to commit to ex gratiapayments, which are now voluntary and totally unregulated in terms of the agreements that any individual business can make, we might make very substantial impacts in that preferential order on any other creditor below. I am simply saying there are other effects that run through, particularly if we were to legislate for those currently voluntary collective agreements to be made a statutory obligation to be paid.